Home > General Topics > Trading > Most consistant daytrading style

Most consistant daytrading style

  1. I am looking for some input into what you feel is the most consistent daytrading style. I have been trading quite some time now and have been focusing on listed news plays for quite some time now. Lately I haven't been able to find too many good plays.

    Most of these plays are gapping up (or down) quite a lot and not really doing much after that - maybe the specialists are that good that they can factor everything into the opening print and take all the juice out of a potential play.

    I used to trade nasdaq stocks but got away from that and really haven't done much with them for a couple of years now - although I really don't mind the way that they trade. Another problem is getting short a listed stock as I dont' have access to bullets. There are many good plays that the specialist just doesn't give you an uptick.

    I have heard a lot of people say that you should focus on a handful of stocks and trade them each and everyday. I used to do this with the semi stocks back in like 98 and 99. The strategy was marginally successful. The problem with focusing on a handful of listed stocks is that I feel you must have access to bullets which I don't.

    Maybe I need to take another look as nasdaq? Although I'm not sure whats going to happen when SuperMontage comes on board. I really don't like to scalp but this market is really tough.

    Any suggestions?

    Leland
     
  2. fade the gaps
     
  3. go back to the basics

    support and resistance
     
  4. I've messed around with fading the gaps but still haven't had much luck with it.
     
  5. shorting @ X.10, cover at X
    buying @ X.90, sell at X+1.00

    :) :) :) :) :) :)
     
  6. Going long at,say 24.90,in anticipation of the stock going to 25,and shorting,at say,33.10 in anticipation of it going to 33.Nasdaq stocks tend to do this constantly,trading toward size at the figure.This strategy of picking up .10 or .20 cents is known to be very profitable.
     
  7. I really don't like scalping for .10 or whatever. I want to be able to take 5-10K shares of stock XYZ and ride it for .75 or more.. That is trading to me!!!

    Leland
     
  8. I was being half-facetious heh.

    I recommend shorting weak stocks and buying strong ones -- up to you to figure out which qualify for which :)
     
  9. I'm with you on that leland, I don't think it is worth putting that much money at risk to make that small amount of profit.
     

  10. he did say "consistent" :) :) :)
     
  11. Leland C: i only trade the index emini for past 2 years but when I used to trade stocks news plays were absolutely the best way to trade stocks.Unless things have changed dramatically I would advise relooking at the possibility of playing the big plays " the day after". I stopped because it is lots of research but it used to work EXCELLENT! aS I STATED i have been away from the individual stock action so i am curious what you think of my idea.
     
  12. I have traded the index futures since 1985 and the best method I personally have found is to sell strength and buy weakness. I trade the ES and NQ contracts using 1 min charts and have developed a method that works for me with strict rules and well defined stop placement and targets.
     
  13. as public participation drops, odds increase that if you use a common strategy you are competing with others just like you. daytraders used to be brothers in arms. now they are eating each other.

    this intensified competition will kill off many daytraders and keep killing them off until the decreased population reflects the decreased food supply. the exact same thing is happening to all participants in a contracting market: specialists, brokers, ibanks, mutual funds, hedge funds, all the way up the chain.

    solution? find an uncrowded niche, i.e. do something that most of your fellow traders aren't, or buckle down and fight for scraps in hope to be one of the last ones standing when the smoke clears.
     
  14. For us little guys its still a good idea to find where the large orders are being placed and ride coattails; a large fund that needs to buy/sell isnt gonna spend too much time shaking out the fleas. Though this sounds like a "passive" or derivative style, you can find good trades for size every day by just noting which stocks are laggards or leaders and tagging along. Today for example, note NVDA on the downside, QLGC on the upside; both exhibited weakness/strength early enough for one to take out a nice chunk of movement, with barely any limit on position size.

    Agreed on the .10 trades, you really want to find a method that doesnt bog itself down when you try to increase size as equity grows.
     
  15. Great responses here on the thread. Plenty of "food for thought."

    larrybf: I have messed around with playing news stock the day after (as you so eloquently put it). Haven't really found any consistency here either but it does have potential. I agree with you that news stocks are probably some of the greatest daytrading candidates around. I like playing stocks that have news/sponsorship because these stocks tend to move. They normally have good liquidity because plenty of other people are involved in them too. Maybe it's just me but when I enter a play I like to know that there is something behind it giving it a little push. I hate saying gee stock XYZ looks great and the market is rallying let's go long and then getting hammered....

    darkhorse: I agree with your views on the trading world. The tough part is finding that niche and capitalizing on it. All we can do is keep plugging away I guess...

    illiquid: Thanks for the comments. Thats why I like news plays because IMHO news provides fuel for the stock to move...

    Leland
     
  16. We all know that momentum is no longer in vogue.

    Another approach is buying weakness & selling strength.

    The opposite was buying strength & selling weakness............
    The 90's.

    Buy wk/Sell strg is not easy because sometimes you step in front of a moving freight train. But doing it on strong stocks (buy a pull back and & on a weak stock (Fading the rally). is not a bad idea in this market.


    If it helps I also am looking for something that is more robust/consistent.
     
  17. If you want consistent results you need to use a systematic approach. Note: a trading method can be systematic without being mechanical. An approach has to be repeatable to be systematic. If you are like me then a having objective entries and then using a bit of discretion on the exits and when not to trade works best. Doing it this way also cuts down on overtrading. If you're not like me then some other method might work better for you.
     
  18. Yes I do this with some degree of success as well though with a twist. The market is not nice enough to make it nice and comfy and predictable at .9 and .1 as it can wiggle to .8 and .2 or .7 and .3 etc. (it can wiggle to what ever the hell it wants for that matter). So I only take on a portion of my maximum position at the .9 or .1 level and then I average down at .8 and .2 if it truly looks like it is just wiggling around. THis avoids taking as many small losses at the .8 level after going long full size at .9 which means what once was a loser can be a winner.

    I do not view this as averaging down in a bad way as I still take the small loss if it does not hold after the 2nd add and I always factor in overall market feel before adding to begin with. It is still whippy but has reduced some of the excessive small losses I was taking in this freaky market. Basically I hope for about a 50/50 win loss ratio and with a risk/reward on any given trade of not much better than 1:1 ie I take quick profits. It sounds crazy but swing the bat enough times without trying to swing for the fence (always take the small loss) then occasionally I get the homerun regardless which takes the risk:reward on the overall strategy to more acceptable levels. I am just fishing like everyone else to find something that works OK in this market. Gee I sound defensive don't I ....guess I anticipate getting ripped for risking my capital on this seemingly mindless strategy :D
     
  19. i dunno...is it the style that is or isn't consistent or the trader? Both I guess. I mean to say that whatever you do, if you do it consistently, will be a consistent style over time and markets..

    If you mean consistent in profit or avoiding loss, the low risk approaches will be more so I think, but they cost more to execute in both costs and labor.
     
  20. Interesting thought about being a consistent trader. I guess a trader probably should stick to their style as long as it is working ok. It's probably a dangerous thing to try and switch styles too often and try to adjust to the market? Find something that works well (like buying strength) and exploit the hell out of it!!!
     
  21. im always trying to improve my style...but some things are just me. I have to experiment with new ideas as time permits or a condition stares me in the face that is right for it.
     
  22. I think it's fine to experiment a little. I guess I am referring to those traders who are constantly changing system or strategies and trying to find the holy grail. In the meantime they just keep getting chewed up....

    Man did I ever miss some great opportunities today. Back at it tomorrow I guess.
     
  23. In this market I trade only two or three big Nasdaq which have over 20 million daily volume, which is over 3 million shares per hour, assuming even trading throughout the day. This is more than enough to trade 3-5-7 thousand shares for 50-75 cents. They trade very smooth and slow like a battleship. Easy to exit if they move against you. The easy part is they trade with the indices. Almost all get a nice ride, long or short, in the first hour of the day on most days.

    Like someone said, we are just riding along on the whales. Watch support/resistance, previous close/open etc. Basic technical. Don't overcomplicate it. No overnights.

    Bad news is good also for the short if you can get executed.
     
  24. Realizing that of the many diverse profitable trading styles(those with an edge), that one might utilize, each must be personalized to fit one's individual personality and emotional makeup in order to work. Trading is mentally challenging enough, not to have a misfit system to add to the mix. My trading style has consistently been for many years to take as much of the large id back and forth price moves from a handful of liquid yet volatile big cap NASD names. I will get on one stock for weeks on end until it's characteristics change for the worse and 'play' that stock both ways each day but realistically lean one way depending on mkt and stock trends. I feel a need to know my vehicle as much as is possible in order for me to be aggressive in taking my albeit simple signals. I feel momentum trading(which i essentially do) is NOT dead, its just that stocks don't trend in one direction for long of late. But the individual id moves are still great. Most complaints to the contrary, i feel, are due to not aggressively trading a system you believe in. When daily volatility slows, i get more disciplined and reduce size, and when the reverse occurs i hit it. Experience helps, but we all must start somewhere, it will come ,believe me.
     
  25. couldn't agree with you more, however i would characterize the id moves more like a jet ski, hence we still must be on our toes for those mkt and stk induced contra moves. I get around performance issues by realizing that some days we're on and some day's we're not. But with good discipline i find i can still be profitable on the off days. Thanks for all the great input on et.
     
  26. I personally am a true believer of the volatility theory...
    I made a model using excel and qlink that calculates various ratios of volatilities among indexes and stocks which provide good entry points on nasdaq and sp futures....

    but of course ask 100 traders for their method, and you'll have 100 answers....

    best of luck